Economy
Fitch Downgrades Nigeria to ‘B’ on Weak Fiscal Buffers
By Dipo Olowookere
Nigeria’s Long-Term Foreign-Currency Issuer Default Rating (IDR) has been downgraded to ‘B’ from ‘B+ by Fitch Ratings, with the outlook negative.
In a statement issued on Monday, Fitch noted that the lowering of the rating was due to the pressures on the country’s external finances caused by crash in the prices of crude oil at the global market by coronavirus pandemic.
The Brent crude, under which Nigeria’s oil is priced, sold around $23 per barrel some weeks ago and only last week hit just over $30 when news hit town that Saudi and Russia will likely have discussions about the market situation.
Nigeria depends largely on crude oil sales for external revenue and according to Fitch, the intensifying external pressures raise risks of disruptive macroeconomic adjustment given the country’s “precarious monetary and exchange rate policy setting and lack of fiscal buffers.”
It said the shock will also raise government debt and interest payment-to-revenue ratios from already particularly high levels and lead to a renewed economic recession.
Fitch said the shock will worsen the overvaluation of the Naira and remedial policy actions taken by the Central Bank of Nigeria (CBN), which it stressed will not “suffice to address deteriorating external imbalances.”
The CBN allowed the exchange rate on the Investor and Exporter Window, on which the bulk of foreign-currency (FC) transactions is held, to depreciate by 6.7 percent since mid-January and devalued the official exchange rate by 15 percent in March, the rating agency stated.
According to Fitch, Nigeria’s vulnerability to short-term capital outflows is high given the sizeable stock of portfolio investments in short-term Naira debt securities, equivalent to $27.7 billion (6.9 percent of GDP) at end-2019 and representing around 72 percent of FC reserves at the time.
“Of these liabilities, $14.7 billion was in non-resident investments in the CBN’s open-market operation bills that were attracted by high interest rates and hedging instruments offered to non-residents at non-economic costs under the CBN’s policy of stabilising the exchange rate.
“Continued reluctance to adjust the exchange rate, portfolio outflows and a wide current-account deficit (CAD) will lead FC reserves to fall to 2.5 months of current account payments at end-2020 under our forecasts, well below the historical ‘B’ median of 3.8 months, and their lowest level since 1994.
“We estimate that the CAD will widen to a record level of 4.9 percent of GDP in 2020, exceeding the historical ‘B’ median of 4.3%, under our assumption of only modest depreciation of the Naira.
“Nigeria’s long-standing current account surplus shifted to a deficit of 4.2 percent of GDP in 2019 on an upsurge in imports, chiefly of equipment goods.
“We project the CAD to narrow to 1.8 percent in 2021 reflecting partial recovery of oil prices to $45/b, import compression and tighter restrictions on FC access,” the agency said.
It further said the country’s external finances are highly vulnerable to a further fall in international oil prices below the current forecasts of about $34/b.
It noted that despite the expiry of production caps under the OPEC+ agreement, there is little scope to ramp up Nigeria’s oil production beyond the current assumption of 2.1 mbpd given capacity constraints and the build-up of a global supply glut on oil markets.
“Under a stable oil production assumption, a $10 drop in average Brent benchmark prices below our current projection would cause the CAD to widen by an additional 1.6 percent of GDP.
“Furthermore, the domestic oil sector’s operational breakeven is around $25-30/barrel, based on official estimates, meaning production cuts are likely should oil prices continue to hover well below $30/barrel,” it said.
Fitch further said the collapse in oil revenues and the slowdown in economic activity will take a toll on the government’s already weak fiscal revenues.
“This will be partly cushioned by the devaluation of the official exchange rate, which will boost fiscal oil revenues in Naira terms.
“In addition, the fall in international fuel prices will allow the government to eliminate the implicit fuel subsidy. Nigeria’s fiscal breakeven oil price is high, at $133/barrel under our estimates, given particularly low non-oil fiscal intakes.
“We project the general government (GG) deficit will widen to 5.8 percent of GDP (federal government, FGN: 3.1 percent) in 2020 from 3.8 percent (FGN: 2.4 percent) in 2019.
“There is limited scope for consolidation through spending cuts given fiscal rigidity from payroll and interest outlays, which will represent 150 percent of the FGN’s revenues and two-thirds of its expenditures in 2020. Cuts to other operational outlays and capital expenditures will be largely offset by higher spending on health services and support to sectors affected by the pandemic shock,” it stated.
By Adedapo Adesanya
The supply of Premium Motor Spirit (PMS), also known as petrol, increased by 55.4 per cent on a month-on-month basis to 71.5 million litres per day in November 2025 from 46 million litres per day in October.
This was contained in the November 2025 fact sheet of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) on Monday.
The data showed that the nation’s consumption also increased by 44.5 per cent or 37.4 million litres to 52.1 million litres per day in November 2025, against 28.9 million litres in October.
The significant increase in petrol supply last month was on account of the imports by the Nigerian National Petroleum Company (NNPC) Limited into the Nigerian market from both the domestic and the international market.
Domestic refineries supplied in the period stood at 17.1 million litres per day, while the average daily consumption of PMS for the month was 52.9 million litres per day.
The NMDPRA noted that no production activities were recorded in all the state-owned refineries, which included Port Harcourt, Warri, and Kaduna refineries, in the period, as the refineries remained shut down.
According to the report, the imports were aimed at building inventory and further guaranteeing supply during the peak demand period.
Other reasons for the increase, according to the NMDPRA, were due to “low supply recorded in September and October 2025, below the national demand threshold; the need for boosting national stock level to meet the peak demand period of end of year festivities, and twelve vessels programmed to discharge into October, which spilled into November.”
On gas, the average daily gas supply climbed to 4.684 billion standard cubic feet per day in November 2025, from the 3.94 bscf/d average processing level recorded in October.
The Nigeria LNG Trains 1-6 also maintained a stable processing output of 3.5 bscf/d in November 2025, but utilisation improved slightly to 73.7 per cent compared with 71.68 per cent in October.
The increase, according to the report, was driven by higher plant utilisation across processing hubs and steady export volumes from the Nigeria LNG plant in Bonny.
“As of November 2025, Nigeria’s major gas processing facilities recorded improved output and utilisation levels, with the Nigeria LNG Trains 1-6 processing 3.50 billion standard cubic feet per day at a utilisation rate of 73.70 per cent.
“Gbaran Ubie Gas Plant processed 1.250 bscf per day, operating at 71.21 per cent utilisation, while the MPNU Bonny River Terminal recorded a throughput of 0.690 bscf per day during the period. Processing activities at the Escravos Gas Plant stood at 0.680 bscf per day, representing a 62 per cent utilisation rate, whereas the Soku Gas Plant emerged as the top performer, processing 0.600 bscf per day at 96.84 per cent utilisation,” it stated.
By Aduragbemi Omiyale
The proposed share reconstruction of a local gaming firm, Secure Electronic Technology (SET), has been suspended.
The Lagos-based company decided to shelve the exercise after negotiations with potential investors crumbled like a house of cards.
Secure Electronic Technology was earlier in talks with some foreign investors interested in the organisation.
Plans were underway to restructure the shares of the company, which are listed on the Nigerian Exchange (NGX) Limited.
However, things did not go as planned as the potential investors pulled out, leaving the board to consider others ways to move the firm forward.
Confirming this development, the company secretary, Ms Irene Attoe, in a statement, said the board would explore other means to keep the company running to deliver value to shareholders.
“This is to notify the NGX and the investing public that a meeting of the board of SET held on Tuesday, December 16, 2025, as scheduled, to consider the status of the proposed share reconstruction and recapitalisation as approved by the members at the Extraordinary General Meeting (EGM) held on April 16, 2025.
“After due deliberations, the board wishes to announce that the proposed share reconstruction will not take place as anticipated due to the inability of the parties to reach a convergence on the best and mutually viable terms.
“Thus, following an impasse in the negotiations, and the investors’ withdrawal from the transaction, the board has, in the interest of all members, decided to accept these outcomes and move ahead in the overall interest of the business.
“The board is committed to driving the strategic objectives of SEC and to seeking viable opportunities for sustainable growth of the company,” the disclosure stated.
Business Post reports that the share price of SET crashed by 3.85 per cent on Tuesday on Customs Street on Tuesday to 75 Kobo. Its 52-week high remains N1.33 and its one-year low is 45 Kobo. Today, investors transacted 39,331,958 units.
By Adedapo Adesanya
Clea, a blockchain-powered platform that allows African importers to pay international suppliers in USD while settling locally, has officially launched.
During its pilot phase, Clea processed more than $4 million in cross-border transactions, demonstrating strong early demand from businesses navigating the complexities of global trade.
Clea addresses persistent challenges that African importers have long struggled with, including limited FX access, unpredictable exchange rates, high bank charges, fraudulent intermediaries, and payment delays that slow or halt shipments. The continent also faces a trade-finance gap estimated at over $120 billion annually, limiting importers’ ability to access the FX and financial infrastructure needed for timely international payments by offering fast, transparent, and direct USD settlements, completed without intermediaries or banking bottlenecks.
Founded by Mr Sheriff Adedokun, Mr Iyiola Osuagwu, and Mr Sidney Egwuatu, Clea was created from the team’s own experiences dealing with unreliable international payments. The platform currently serves Nigerian importers trading with suppliers in the United States, China, and the UAE, with plans to expand into additional trade corridors.
The platform will allow local payments in Naira with instant access to Dollars as well as instant, same-day, or next-day settlement options and transparent, traceable transactions that reduce fraud risk.
Speaking on the launch, Mr Adedokun said, “Importers face unnecessary stress when payments are delayed or rejected. Clea eliminates that uncertainty by offering reliable, secure, and traceable payments completed in the importer’s own name, strengthening supplier confidence from day one.”
Mr Osuagwu, co-founder & CTO, added, “Our goal is to make global trade feel as seamless as a local transfer. By connecting local currencies to global transactions through blockchain technology, we are removing long-standing barriers that have limited African importers for years.”
According to a statement shared with Business Post, Clea is already working with shipping operators who refer merchants to the platform and is also engaging trade associations and logistics networks in key import hubs. The company remains fully bootstrapped but is open to strategic investors aligned with its mission to build a trusted global payment network for African businesses.
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